Macro Wrap
Last night was not a happy one on risk markets, with the rolling manufacturing PMI (purchasers managing index) and unemployment numbers lending (sic) more credence to a wider and deeper European recession. See Delusional Economics for more.
Following the better than expected ISM manufacturing survey (covered here by Houses and Holes) the night before, US markets were rocked by an extremely weak ADP employment report, which came in way below consensus (119K vs 183K expected):
The second whammy were factory orders for March, which came in at -1.5% showing growth in new orders and shipment slipping along with a significant rise in oil inventories, which put a damper on commodities overnight, alongside every other risk market.
See charts of all major markets at bottom of post.
Bonds:
- US 10 year Treasuries were bid up again, yields falling 2 pips to 1.92%
- German 10 year bunds were heavily bought up, falling 5 pips to 1.6% followed by UK 10 years bid up the same, yields slumping to 2.04%
- peripheral bonds slipped last night, with Spanish and Italian 10 years yields rising 6 and 5 pips respectively to 5.79% and 5.5%
Currencies:
- The USD was strong all night with the Dollar Index climbing above 79 points, with the Euro weaker, at 1.3158
- The Yen fell sharply against the USD first, before coming back to where it started at 80.12 which should bode well for the Nikkei
- AUD has recovered from a below 1.03 slump to be just above at 1.0328 against the USD at the start of Asian trading, but looks weak stuck in a trading range.
Equities:
- Eurostoxx 50 was down 0.7% in reaction to the PMI data, with the French CAC the only positive note, up 0.4%
- The FTSE was off nearly 1% to 5758 points, the DAX off 0.7% to 6710 and the peripherals slammed hard, IBEX 35 and FTSE MIB both down 2.5%
- The US bourses were mixed, with the S&P 500 slipping 0.25%, the Dow Jones flat whilst the NASDAQ 100 was up 0.3% mainly because Apple (AAPL) gained almost 4% – or 0.7%
Commodities:
- The CRB Index gave back gains mainly because of crude, down 3 points to 304 points
- Oil prices were it by the inventory report, with ICE Brent off 1.1% to $118.26 per barrel and NYMEX WTI crude slightly better, only down 0.7% to $105.39 USD per barrel
- Natural gas continues to give trader’s nightmares, after surging recently, it slumped 5% overnight falling back to $2.25
- Gold (USD) had another flat night with the seemingly usual shenigans at the NYMEX start settling unchanged at $1653USD an ounce
- Iron ore import prices into China have slipped, falling nearly $US1 per tonne to $US 144.60
Today in Asia
- Data today locally and regionally is sparse again, with markets having to digest the awful (but expected) outcomes from Europe.
- The futures are pointing to a flat to weak open for the ASX200, probably down 5 points or so to 4430 points.
- Click here for our economic calendar.
Market Charts
| AUD_USD | EUR_USD |
| US DOLLAR INDEX | GOLD USD |
| S&P500 | VIX VOLATILITY |
| DAX 30 | SPOT BRENT CRUDE |
| RJ/CRB COMMODITY INDEX | CHINA IMPORT IRON ORE |
Sovereign 10 year bond yields
| UK | USA | ||||||||
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JAPAN | GREECE | IRELAND | SPAIN | ITALY | FRANCE | GERMANY | PORTUGAL | AUSTRALIA |
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